The use of transaction cards (including debit or ATM cards) for payment of merchandise is ever increasing. When purchasing merchandise using a standard transaction (i.e., credit) card, the purchaser will typically provide the merchant with the card bearing the account number (or the card number and expiration date if the purchase is being made over a telephone or computer network), and the merchant will then seek authorization from the issuer of the credit card to verify that payment will be forthcoming.
The request for authorization is conventionally made over high-speed telecommunication links using modern computer data processors. Thus, the merchant will normally receive an authorization response in “real-time.” Credit cards and, particularly, credit card account numbers are somewhat standardized, thus allowing a merchant to accept credit cards from a number of credit card companies, such as companies providing credit card services under the marks VISA®, MASTERCARD® and DISCOVER®, and others, while being connected to a single credit authorization system. The account number of such cards contains information that identifies the sponsor and the particular issuer of the card, such as a local or national bank. This information is necessary to route any authorization request to the appropriate card-issuer using the credit authorization system.
One standard computer network for transmitting authorization requests is the VISA® credit transaction network. In addition to VISA® credit cards, merchants connected to this network may seek authorization for approval of transactions involving other credit cards, such as MASTERCARD® and DISCOVER® credit cards. The VISA® credit transaction network includes a plurality of data processors and financial institutions, all interconnected through telecommunication links which, based on a six digit bank identification number (BIN), route all authorization requests to the appropriate card-issuer and all authorization responses back to the requesting merchant.
In the case of online shopping, some customers do not accept providing payment by means of a credit card as this requires disclosure of the credit card number. Hence, some customers prefer other payment methods such as by check, bank or wire transfer or others. In this instance, no credit verification is available for the online shop and no protection against bad checking schemes and the like.
U.S. Pat. No. 6,377,935 shows a system which enables a store to adopt a risk management approach to credit verification based on a customers transactional history with the store. This includes frequency and dollar volume over specified intervals. A disadvantage of this system is that no such transactional history and thus no credit verification is available for a new customer and that a customer's payment history with respect to other stores cannot be taken in consideration.
U.S. patent application Ser. No. 2002/0095373A1 shows a credit monitoring system. This system enables to monitor a buyer's cumulative credit exposure by adding all invoices indicating payment obligations for which payment, or complete payment, has not yet been made, considering any payment information stored in a trade database. While this system provides monitoring of a buyers cumulative credit exposure, it does not provide credit authorization.
Therefore, a need exists for providing credit authorization systems and methods for online shops which is useable irrespective of the selected payment method.